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The answer to this dilemma is to have an offset mortgage. Your savings offset the amount borrowed, and you only pay interest on the difference. Once you've save
by ajb 5y ago
The answer to this dilemma is to have an offset mortgage. Your savings offset the amount borrowed, and you only pay interest on the difference. Once you've saved enough to cover it, you pay no interest.
- qorrect 5y agoWhy wouldn't you just buy the house outright at that point ?
- lostcolony 5y agoFiscal cushion. If an emergency comes up, rather than having no money to pay for it, you instead can cover it, and just pay a little extra each month going forward until you recover. That said, I don't think they exist in the US.
- ineedasername 5y agoThough something to keep in mind is that offset mortgages are not an option in all locales. The US for example doesn't have them.
- ajb 5y agoHuh, I just assumed that the US would have any financial instrument that was available elsewhere. I guess the same US statutory intervention into the mortgage market, that makes long fixed-rate mortgages possible, also makes it difficult to have custom mortgage instruments?